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Capital markets regulator, the Securities and Exchange Board of India, has concluded that Bank of America improperly shared material non public information linked to a $180 million block trade and later misled investigators, according to a report by the Wall Street Journal.
The report said SEBI had issued a show cause notice to Bank of America in November, alleging that the bank improperly circulated price sensitive information related to the sale of shares in Aditya Birla Sun Life AMC in 2024.
As per the regulator, members of the deal team shared confidential details with employees who were not directly involved in executing the transaction.
SEBI also alleged that the bank gave inaccurate responses when questioned about the suspected information leak and failed to put in place adequate safeguards to prevent sensitive capital markets information from being disclosed, the report said.
According to the Journal, Bank of America is in the process of preparing its reply to the regulator's findings and is expected to pursue a settlement running into several million dollars, without admitting or denying any wrongdoing.
The Journal had first flagged the issue in 2024 following a whistleblower complaint alleging the leak. At the time, a Bank of America spokesperson told Reuters that the bank had found no evidence supporting the allegations.
Sharing material non public information ahead of a market announcement can allow select investors to benefit from anticipated price movements and is prohibited in India and several other jurisdictions.
The Journal added that while Bank of America initially told SEBI that its processes around the block trade were compliant, it later revised its submission after an internal review and provided records showing that individuals outside the core deal team had interacted with investors about the transaction.
In 2024, Reuters had reported that three Bank of America investment bankers in India exited the firm amid an internal probe into the matter.
The report said SEBI had issued a show cause notice to Bank of America in November, alleging that the bank improperly circulated price sensitive information related to the sale of shares in Aditya Birla Sun Life AMC in 2024.
As per the regulator, members of the deal team shared confidential details with employees who were not directly involved in executing the transaction.
SEBI also alleged that the bank gave inaccurate responses when questioned about the suspected information leak and failed to put in place adequate safeguards to prevent sensitive capital markets information from being disclosed, the report said.
According to the Journal, Bank of America is in the process of preparing its reply to the regulator's findings and is expected to pursue a settlement running into several million dollars, without admitting or denying any wrongdoing.
The Journal had first flagged the issue in 2024 following a whistleblower complaint alleging the leak. At the time, a Bank of America spokesperson told Reuters that the bank had found no evidence supporting the allegations.
Sharing material non public information ahead of a market announcement can allow select investors to benefit from anticipated price movements and is prohibited in India and several other jurisdictions.
The Journal added that while Bank of America initially told SEBI that its processes around the block trade were compliant, it later revised its submission after an internal review and provided records showing that individuals outside the core deal team had interacted with investors about the transaction.
In 2024, Reuters had reported that three Bank of America investment bankers in India exited the firm amid an internal probe into the matter.
